3-Candle Reversal Pattern-vahid2star

3-Candle Reversal Zones + Hammer Confirmation (with Risk Management & Alerts)

This script combines 3-candle reversal detection, hammer confirmations, and smart demand/supply zone plotting into a single tool designed for both discretionary and automated traders.

🔍 Core Logic

3-Candle Reversal Pattern

Candle-1: Strong move in one direction (big body).

Candle-2: Doji-like candle (high shadow/body ratio).

Candle-3: Reversal candle in the opposite direction (large body relative to Candle-2).

A gap after Candle-3 is required for extra confirmation.

Hammer Confirmation (Hammer-1 & Hammer-2)

After a valid 3-candle setup, the script searches for a hammer pattern near the zone.

Hammer-1: Draws a box directly on the hammer range if followed by a strong confirming candle.

Hammer-2: If another hammer forms after the confirmation candle and holds for N bars (configurable), a second hammer box is drawn.

Demand & Supply Zones

For bullish setups, a demand zone is created from the Candle-2 low to the Candle-1 low.

For bearish setups, a supply zone is created from the Candle-2 high to the Candle-1 high.

Zones extend to the right until price interacts with them.

🛠 Filters & Quality Controls

Trend filter (optional):
Only draw zones if price respects higher-timeframe EMA200 slope and LTF EMA alignment.

Market structure filter:
Require higher-high / higher-low (for bullish) or lower-high / lower-low (for bearish).

ATR filter:
Zones must have a minimum height relative to ATR.

Overlap control:
Avoid drawing zones that overlap too heavily with existing ones.

Cooldown:
Restrict consecutive zones of the same type within a user-defined bar distance.

🎯 Risk Management & Strategy

Dynamic position sizing:
Trade size is automatically calculated from account equity, risk %, and leverage.

Stop-loss & Take-profit:
SL placed just beyond the zone ± buffer ticks.
TP automatically set at user-defined Reward:Risk ratio (e.g., 3:1).

Capital protection:
Trades respect max leverage and risk per position settings.

⚡ Alerts

The script provides one-time alerts for each zone:

🔔 First Touch Alert → Triggered when price first touches a demand, supply, or hammer box.

Each zone only fires one alert, avoiding duplicates on re-touch or trade exit.

📊 Visuals

Demand zones: Green boxes.

Supply zones: Red boxes.

Hammer boxes: Blue (bullish) / Orange (bearish).

Used zones: Greyed out after price fills them.

Outcomes: Zones change to green if TP is hit, red if SL is hit.

Optional labels mark “Bullish zone ✓”, “Bearish zone ✓”, “Hammer-1 ✓”, or “Hammer-2 ✓” when confirmed.

🔧 Settings Overview

Core pattern ratios (C1/C2, C3/C2 size multipliers).

Doji definition (shadow/body ratio).

Hammer search depth, confirmation delay, and strictness.

Risk % per trade, leverage cap, stop buffer, RR ratio.

Visual styling (colors, max box count, labels).

Trend, structure, ATR, overlap, and cooldown filters.

Option to disable orders (use as indicator + alerts only).

⚠️ Disclaimer

This script is a technical analysis tool intended for educational purposes.
It does not guarantee profits. Use proper risk management and test thoroughly before applying in live trading.

✨ With its combination of 3-candle reversals, hammer confirmations, and smart filtering, this script is designed to reduce noise, highlight high-probability zones, and give traders both visual structure and actionable alerts.